One of the major requirements for sustainable and inclusive economic growth is an extensive and efficient infrastructure network i.e. electricity, roads and bridges, ports, airports, telecommunications, railways, etc. It is critical for the effective functioning of the economy and industry. The key to global competitiveness of the Indian economy lies in building a high class infrastructure. To accelerate the pace of infrastructure development and reduce the infrastructure deficit, the Government has initiated a host of projects and schemes to upgrade physical infrastructure in all crucial sectors. Despite several challenges, the positive results of the Government’s initiatives are showing in some sectors. However, required capacity addition in a time-bound manner needs focused attention in other sectors. Here we present a synopsis of power, rail, road and telecom sectors which directly effects the wire & cable industry growth.
Power Generation
Electricity generation by power utilities during 2010-11 has been targeted to go up by 7.7 % to 830.757 billion KWh. The growth in power generation during April-December 2010 was about 4.5 % as compared to about 6.17 % during April- December 2009, with nuclear, hydro, and thermal power generation registering growth of 33 per cent, 8 % and 3 % respectively.
Capacity addition in Power Sector
The Eleventh Plan envisaged capacity addition of 78,700 MW in the power sector, of which 19.9 per cent was hydro, 75.8 per cent thermal, and the rest nuclear power. This has been revised to 62,374 MW now comprising 8237MW hydro, 50,757 MW thermal, and 3380 MW nuclear power. Capacity addition of 32,032 MW has been achieved till 31 December 2010 and projects with a capacity of 30,725 MW are under construction for commissioning during the remaining period of Eleventh Plan.
Against the revised target of 12,039 MW, capacity addition of 9,263 MW was achieved during 2007-08. On account of revision in the definition of commissioning of thermal projects, the capacity addition target for the year 2008-09 was revised to 7,530 MW, against which a capacity of 3,454 MW was added. The capacity addition target for the year 2009-10 was 14,507 MW, against which a capacity of 9585 MW was added up to 31 March 2010. In the current fiscal, 9730.5 MW has been added till 31 December 2010 which is higher than the highest ever capacity addition of 9585 MW in a single year, i.e 2009-10.
Trading of Electricity
Power trading helps in resource optimization by facilitating the disposal of surplus power with distribution utilities and in meeting the short-term demand. The Central and State Electricity Regulatory Commissions have powers to grant inter-State and intra-State trading licences respectively. The CERC has so far granted 47 inter-State trading licences, of which 38 were in existence as on 31 December 2010. Details of electricity trading by licensed inter-State traders, in terms of volume, price, and margin are given in.
Rural Electrification
Under the RGGVY, 87,791 villages have been electrified and connections released to 135.31 lakh below poverty line (BPL) households up to 30 November 2010. Under the Tenth Five Year Plan, 235 projects covering 68,763 villages and 83.10 lakh BPL connections were sanctioned at a cost of 9,732.90 crore. In Phase I of the Eleventh Plan period, 338 projects have been sanctioned for implementation at a cost of Rs. 16,620.61 crore for electrification of 49,736 villages and release of connections to 163.34 lakh BPL households. Till 30 November 2010, 333 projects have been awarded and franchisees are in place in 1,10,567 villages in 16 States.
ROADS: National Highways Development Project (NHDP)
About 25 per cent of the total length of National Highways (NHs) is single lane / intermediate lane, about 52 per cent is two lane standard, and the balance 23 per cent is four lane standard or more. In 2010-11, the achievement under various phases of the NHDP up to November 2010 has been about 1,007 km and projects have been awarded for a total length of about 3,780 km. The status of the NHDP as in November 2010 is shown in.
Railways:
The Annual Plan for the year 2011-12 has been proposed at Rs.57,630 crore which is the highest ever plan investment by the railways in a single year. The Plan is proposed to be financed through GBS of Rs.20,000 crore, diesel cess of Rs. 1041 crore, internal resources of Rs. 14,219 crore, market borrowings of Rs. 20,594 crore through Indian Railway Finance Corporation (IRFC), considering its past excellent performance in the financial market.
Improving upon 2010-11, a greater thrust is being given to the expansion of the rail network with a larger allocation of Rs. 9,583 crore for new lines. It is planned to complete 1,000 km of new lines in 2011-12. In addition, the left over new lines from last year’s target will also be completed. Apart from this, Rs. 5,406 crore and Rs. 2,470 crore has been given for doubling and gauge conversion projects to complete 867 km and 1,017 km respectively. To overcome shortages in wagons, coaches and locomotives, Rs.13,820 crore has been earmarked for acquisition of rolling stock.
Dedicated Freight Corridor project (DFC)
11.71 The DFC project envisaging a Western DFC (1534 km) from Mumbai to Rewari/TKD to cater largely to the container transport requirement and an Eastern DFC (1839 km) from Ludhiana to Dankuni largely to serve coal and steel traffic is being implemented by the Dedicated Freight Corridor Corporation of India Ltd. (DFCCIL). The base project cost is estimated at about Rs. 50,761 crore (excluding escalation, contingencies, taxes/duties, and interest during construction). The project is being funded through a debt to equity ratio of 2:1 with major debt expected from bilateral/multilateral funding agencies like the Japan International Cooperative Agency and World Bank. Along the Western DFC alignment, the Delhi-Mumbai industrial corridor is also coming up. Considering the need for DFCs on other important routes, a preliminary engineering cum traffic survey (PETS) is being undertaken on the following routes — north-south (Delhi to Chennai), east-west (Kolkata to Mumbai), east-south (Kharagpur to Vijayawada), and south (Goa to Chennai).
Telecommunications
The opening of the sector has not only led to rapid growth but also helped a great deal towards maximization of consumer benefits as tariff have been falling across the board. From only 76.54 million telephone subscribers in 2004, the number increased to 764.77 million at the end of November 2010. Wireless telephone connections have contributed to this growth as their number rose from 35.62 million in March 2004 to 729.58 million at the end of November 2010. The wire-line has shown a decline from 40.92 million in 2004 to 35.19 million in November 2010.
Internet / Broadband
With supportive policies, broadband subscribers grew from 8.77 million as in March 2010 to about 10.71 million up to November 2010. A target of 20 million by 2010 has been set in broadband policy. The auction of BWA spectrum has been successfully conducted. Newer Access technologies like Broad Band Wireless Access (BWA) can significantly transform the character of internet/broadband scenario in India. This will encourage further expansion of wireless service with a vision of providing ‘Broadband for all’.
Financing Infrastructure
Net bank credit to infrastructure in 2009-10 defined as the difference between outstanding gross deployment of bank credit to infrastructure in March 2009 and March 2010, increased substantially in the current fiscal (Table 6). As compared to net bank credit increase of Rs. 64,322 crore during April-November 2009-10 there has been an increase of Rs. 1,02,301 crore during April-November 2010, showing 59 per cent rise.
The total FDI inflows during April-November 2010 have been low compared to the inflows during the same period in the previous year. FDI inflows into the petroleum and natural gas and air transport sectors have been comparatively higher during the current financial year. FDI inflows into the power, telecommunications, and information and broadcasting sectors have been comparatively lower during 2010-11.